Congressional Democrats are bracing for a double whammy on the fundraising front — a recession that may limit donors’ ability to give and a new Obama operation that could siphon off money they might otherwise get.

The good news for the Democrats? They’re not the Republicans.

It’s early in the 2009-2010 cycle — President Obama’s inauguration last week marked the unofficial start of the money chase — but some trends are already emerging: There is “concern,” but not panic, among fundraising pros as the economic slowdown takes hold; small donors, like those who fueled Obama’s White House run, are likely to be affected more than big donors; and Republicans will get hit worse, possibly far worse, than Democrats.

A Democratic insider, speaking on the condition of anonymity, said direct-mail fundraising for Democratic congressional candidates started to “sharply decline” in September and October as “donor fatigue” and the extent of the Wall Street collapse became apparent — but that the drop-off was masked by Obama’s continued success in raising online funds.

“What this means for this cycle, I don’t think we really know yet,” said the Democratic operative. “I think we will continue to see the low-dollar stuff kind of underperform ... On the high-dollar piece, I think it’s going to be very slow at the beginning. As far as donors I’ve talked to, they’re saying, ‘I’m going to need a few months to see what the economy is going to do.’”

One top Senate Democrat said big donors, who can cut checks for as much as $60,800 to the national party committees this upcoming cycle, “will still continue to give, but it’s going to take a lot more work to get them there. What used to take two calls, now takes five. But somebody who had $80 million and now has $40 million is still a wealthy person and can afford to give.”

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Congressional Democrats also are privately alarmed by Obama’s future fundraising plans. The Los Angeles Times reported that “Organizing for America,” Obama’s new organization, “will employ a full-time staff of hundreds of professional organizers — possibly an average of between one and two workers per congressional district in certain politically important states.”

The possibility that Obama will have a separate fundraising vehicle, outside the Democratic National Committee, which he already controls, has led to “delicate discussions” with party leaders on Capitol Hill.

Conservative House Democrats fear that Obama will use his fundraising muscle to organize support in their districts — and then pressure them to back legislation that could hurt their reelection chances.
“The Blue Dogs are really worried about this,” said a Democratic insider. “They are complaining to leadership about it already.”

Obama’s popularity with Democratic faithful could also spur wealthy donors to give to the DNC rather than to the congressional committees.

“We never really had to compete with the DNC [under former Chairman Howard Dean] for major donors,” acknowledged a top Democratic strategist. “Now we have to compete with Obama. No one knows what that will be like.”

Publicly, the chairmen of the Democratic congressional campaign committees — Sens. Robert Menendez (D-N.J) and Rep. Chris Van Hollen (D-Md.) — are predicting that their panels will do at least as well this cycle as they the last time around.

Menendez says he intends to meet or beat the $155 million the Democratic Senatorial Campaign Committee raised in 2007-08 — even though then-Chairman Charles Schumer (D-N.Y.) raised a substantial portion of that money from now-decimated Wall Street firms.

“My early conversations and outreach doesn’t have me concerned about it,” Menendez said of the Wall Street collapse. “Obviously, there’s some angst by some of those sectors, but for the most part, they’ve been responsive, I’ve gotten all the right indicators.”

“I think people are still committed to change and know it’s important to provide [Democrats] with the resources to get the message out,” added Van Hollen.

Both Menendez and Van Hollen saw their committees take on serious debt last cycle. The Obama campaign has given them each $3 million to help pay off debt, but that’s less than Hill leaders requested.

House Speaker Nancy Pelosi (D-Calif.) has pressed lawmakers to help pay off the DCCC’s debt, which currently stands at $13 million. The DSCC is $10 million in the red.

The Republican committees have less debt — the National Republican Congressional Committee has $6 million in debt, while the National Republican Senatorial Committee is down $3.5 million — but the Republicans start the 2009-10 cycle in a bigger hole politically.

They’ve suffered two disastrous election cycles in a row. And while President Bush may have been a drain on their political fortunes, he was also the single biggest fundraising draw in GOP history.
And then there’s the recession.

“It obviously has an impact,” said NRSC Chairman Sen. John Cornyn (R-Texas). “Some people were in business a year ago and now are not.”

Cornyn hopes to create national fundraising councils for each major Senate race, as he did for his own race last cycle. And he is hoping that Texas donors — who haven’t been hit as hard by the economic downturn — will help fuel a comeback for his party.

“Last cycle, the DSCC raised, I believe it was $154 million, and the NRSC raised $91 million. We need to see some parity,” Cornyn said.

Cornyn has already begun to aggressively woo big Republican donors. And behind the scenes, a battle is shaping up between the NRSC and the NRCC as they fight for dollars from some of the same major donors.

“Keeping at least 40 senators is a lot sexier than giving to the House minority, which has no power at all,” said a Senate GOP campaign operative. “We are using that message with everyone we talk to.”

The NRCC could face the toughest road of any of the congressional committees. House Republicans are now nearly 40 seats away from a majority. Thus, unless there’s a huge GOP wave in 2010, they aren’t getting the House back for at least two cycles.

“Fundraising during a recession is not an easy task for any committee in either party, but we plan to make the case to our donors that the policies put forth by Nancy Pelosi and the Democrats in Congress will only further hamper our ability to fight our way out of this recession,” said Texas Rep. Pete Sessions, the NRCC’s new chairman.

Sessions plans to appeal to the same Texas donors Cornyn is eyeing, but Republicans acknowledge that he has a much tougher sell.

“From a Republican perspective, when we got into the minority, I expected a 10 to 15 percent drop-off from the previous cycle,” said one GOP consultant who works with House Republicans. “What I found was more like a 20 to 25 percent drop-off.”

“I think it’s gonna be hard,” said another GOP fundraiser. “A recession impacts major donors. The damage to our brand impacts smaller donors. And the perception that we won’t be winning anything back anytime soon impacts K Street and ‘access’ donors. That’s not a very good platform to start from.”